In June, the Supreme Court upheld the individual mandate in President Obama's national health care law. The mandate makes possible an expansion of Medicaid and the establishment of subsidized health insurance exchanges. These two provisions will be responsible for $1.7 trillion in spending over the next decade, according to the Congressional Budget Office. Together, they are expected to provide insurance to 30 million Americans and create the infrastructure that liberals hope to use to push the nation, over time, into a fully government-run health care system.
With Obama re-elected, repeal ceases to be an option for at least the next four years. So 30 Republican governors will have to make a decision about whether they want to help the federal government implement Obamacare, or leave the onus on the Obama administration.
One of the silver linings of the Supreme Court decision is that it let states opt out of the Medicaid expansion. Medicaid is one of the programs that is crushing state budgets. If implemented as intended, Obamacare would add 18 million beneficiaries to the program's rolls. Though the federal government lures states with a honey pot in the short term -- covering all of the expansion through 2016 -- by 2020 the states will be asked to kick in 10 percent of the cost, amounting to billions of dollars of spending imposed on states nationwide each year. It would be to the long-term benefit of governors to opt out of the expansion.
Separately, the health care law was designed to coerce governors into embracing exchanges on which individuals will be provided with federal subsidies to purchase insurance. If a state doesn't establish its own exchange, the law specifies that the federal government will step in and set one up for them. Given that Republicans typically favor more state and local control, there's a clear temptation to create the exchanges themselves. But they should resist that temptation.
Though the law creates the veneer of state flexibility on the exchanges, the reality is that all of the major decisions will be made from Washington. That includes the broad structure of the exchanges as well as the details of what kind of health care plans will be offered in them and how they will be marketed. A careful reading of the law finds that all of the sections about state "flexibility" are filled with caveats that render them useless in practice, because Secretary of Health and Human Services Kathleen Sebelius will be running the show.
For instance, Obamacare specifies that, "The Secretary shall, by regulation, establish criteria for the certification of health plans as qualified health plans." In other words, Sebelius will get to decide what type of health care plans can be offered on these state exchanges. Then, there's this dandy: "An Exchange may not establish rules that conflict with or prevent the application of regulations promulgated by the Secretary under this subtitle." What kind of flexibility does that offer?
Given that governors will have no real control over the exchanges anyway, they should let Obama administration officials sleep in the bed they made for themselves. It's highly doubtful that the same administration responsible for the failed economic stimulus package will be able to operate dozens of exchanges competently. Republican governors should allow the feds to live with the mess they created rather than clean up for them.